Gemini Insurance Co. v. 33 East Maintenance, Inc., 17-7393 (D.N.J. Jan. 22, 2019) is a fascinating decision. The court held that a “Named Insured versus Name Insured” exclusion did not apply to a claim seeking damages for the death of a named insured’s employee. I don’t often say here whether I believe a case was rightly or wrongly decided. But this case was seriously wrongly decided.

The case is a little complex and involves various suits and parties. I’ll distill it here to the aspects that are relevant.

Brian Pancoast, an employee of Freehold Cartage, Inc. – that’s important -- died during the course of his employment. He was working on a specialty roll-off tank/container when the hatch closed on him. Dana Pancoast and Brian’s Estate filed a wrongful death and survivorship action against various Freehold parties. Following various procedural comings and goings, the only remaining defendant was FCI Transport.

The Estate and Dana Pancoast entered into a settlement/consent judgment with FCI Transport for $3,750,000. FCI Transport assigned to the Estate and Dana Pancoast all of its rights against Gemini Insurance, under an excess liability policy. [A primary policy tendered its limit of $1,000,000.]

Freehold Cartage, Inc. and FCI Transport were both Named Insureds under the Gemini Policy. Thus, Gemini maintained that, based on the policy’s “Named Insured versus Name Insured” exclusion, it had no obligation to provide coverage for the settlement. The exclusion provided as follows: “This Insurance does not apply to: Any liability, costs or expenses of any Named Insured or its ‘employee’ arising out of, caused or contributed to by any ‘bodily injury’ or ‘property damage’ claimed by any other Named Insured or its ‘employees.’” (emphasis added).

As the court saw it, the exclusion did not apply because, even though Brian Pancoast was an employee of Freehold Cartage, Inc., a Named Insured, he was not the one claiming bodily injury. Rather, it was Mr. Pancoast’s widow and the Estate that were claiming bodily injury.

Gemini argued that the exclusion “applies to the Estate and Dana Pancoast, even though they are not Named Insureds, because there is nothing in the Exclusion that looks to who has brought a claim or . . . even what theory of liability is pled. Instead, it looks whose [sic] injuries the Named Insured is liable for. As such, Gemini contends that because the bodily injury at issue was regarding Brian Pancoast, an employee of a Named Insured, Freehold Cartage, Inc., the Exclusion applies.”

Gemini also argued that “even if the Exclusion looks to who has brought the claim, the claims brought by the Estate and Dana Pancoast are the equivalent of a claim brought by Brian Pancoast because, under New Jersey Law, the Estate stands in the shoes of the decedent. Further, under New Jersey law, the claim and damages asserted by Dana Pancoast do not exist independent of the Estate’s Wrongful Death claim for the bodily injuries and death of [Brian] Pancoast.”

The court did not accept these arguments: “This Exclusion is unambiguous and unequivocal, and undoubtably revolves around who is asserting the claim, not who it initially belonged to or what claim is being asserted. By its plain terms, the Exclusion is expressly limited to claims asserted by a Named Insured or its employees, not an estate or family member.” (emphasis added). The court added that “if Gemini wanted the Exclusion to bar coverage for claims by a Named Insured’s deceased employee’s estate or spouse, it should have drafted it accordingly. Gemini could have, for example, drafted the Exclusion to exclude coverage for liability claimed by or on behalf of a Named Insured or its employees, or claims made by estates or decedent’s widows.” To this point, the court identified other provisions, in the Gemini policy, that purportedly would have supported the interpretation that Gemini sought.

Simply put, it belies common sense for coverage, under a general liability policy, to turn on whether a person, injured by an insured, lives or dies. The claims brought by the widow and Estate are the equivalent of claims brought by Brian Pancoast. The Estate stands in the shoes of Brian Pancoast. The claims of the widow do not exist independent of the Estate’s Wrongful Death claim. But, even more importantly, the court’s focus on the “claimed by” language in the exclusion does not support its decision. The exclusion is clearly tied to whose injuries the Named Insured is liable for. The court impermissibly reads “claimed by” as “who is making a claim.”